Nessler v. Nessler

Filed 3/14/08 NO. 4-07-0220

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

JILL D. NESSLER, n/k/a JILL D. EGIZII, ) Appeal from
Plaintiff-Appellant, ) Circuit Court of
v. ) Sangamon County
FREDERIC W. NESSLER, ) No. 05CH253
Defendant-Appellee. )
) Honorable
) Theodis P. Lewis,
) Judge Presiding.
_________________________________________________________________

JUSTICE COOK delivered the opinion of the court:

Plaintiff Jill D. Nessler, now known as Jill D. Egizii,

brought an action for money damages proximately caused by defen-

dant Frederic W. Nessler's alleged fraudulent inducement of her

execution of a marital settlement agreement (MSA) and other

ancillary documents. The agreement was incorporated in a judg-

ment of dissolution. Defendant moved pursuant to section 2-619

of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West

2006)) to dismiss plaintiff's action as an attack upon the

judgment of dissolution in violation of sections 2-1203 (735 ILCS

5/2-1203 (West 2006)) and 2-1401 (735 ILCS 5/2-1401 (West 2006))

of the Code. The trial court granted defendant's motion.

Plaintiff appeals. We reverse and remand.

I. BACKGROUND

Plaintiff alleged the following in her second amended

complaint.

Defendant and plaintiff were married on January 16,

1983. The couple was married in and resided in Sangamon County.
During their marriage, defendant was a licensed attorney in

Illinois and actively engaged in the practice of law. Plaintiff

was not an attorney but worked at her husband's law firm.

Plaintiff claimed she knew nothing about the investment and

management of the couple's assets and allowed defendant to

exercise absolute influence and control over all of their assets.

During the marriage, the couple acquired substantial real and

personal property and the acquisition of the property was at the

direction and under the control of defendant.

In 1996, plaintiff spoke to defendant about a separa-

tion or divorce. At that time, plaintiff claimed she had no

knowledge of her rights upon dissolution of their marriage, and

she had no knowledge of the nature and extent of the parties'

marital property. According to plaintiff, once she brought up

separation or divorce, defendant began a plan to secure title,

control, and sole benefit of all of the couple's marital assets

in violation of her rights upon dissolution. To further his

plan, defendant told plaintiff he still loved her and did not

want to dissolve their marriage.

Plaintiff claimed she believed defendant still loved

her, and based upon that belief she continued to trust him

regarding his representations about the dissolution of the

marriage and management of their joint assets. According to

plaintiff, defendant made the following misrepresentations to

her: (1) upon a dissolution of their marriage the court could

and likely would place substantially all of their marital assets

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in trust for their children; (2) since he had earned the money

giving rise to the acquisition of the assets, he would be awarded

all of the assets not placed in a trust for the parties' chil-

dren; and (3) she would not receive any marital assets or income

upon a dissolution of the parties' marriage. Defendant then told

plaintiff he would be willing to enter into an agreement with her

giving her one half of all of their property if she agreed to

continue to live in a separate residence on the couple's marital

property and not publicly disclose any change in their status as

husband and wife in furtherance of his attempt to reconcile their

marriage. Plaintiff agreed to defendant's proposal relying upon

defendant's misrepresentations.

Defendant then engaged an attorney to prepare various

documents that plaintiff claimed effectively denied her title to

any of the couple's marital property upon the dissolution of

their marriage. The documents were (1) the MSA, which deposited

all of the couple's property into two trusts with plaintiff and

defendant as trustees but with defendant maintaining absolute and

exclusive control for his lifetime; (2) the Nessler living trust

agreement, which named plaintiff and defendant trustees but which

gave plaintiff no rights until defendant's death; (3) the Nessler

children's trust, which named plaintiff and defendant as trustees

but which gave plaintiff no interest of any kind; and (4) com-

plaints for dissolution of marriage and ancillary documents

captioned in various counties.

Defendant told plaintiff that the MSA provided for the

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couple's common ownership of all of their marital assets as equal

trustees and would divide the assets equally upon the failure of

the parties to reconcile their marriage. Plaintiff claims

defendant did not present the MSA to her until October 18, 1996,

when he took her to the courthouse in Virginia, Illinois, to

secure a judgment of dissolution. Defendant counters that the

MSA shows that both parties appeared before a notary public on

October 15, 1996, and signed the MSA.

Plaintiff stated she did not engage or retain counsel

relative to the preparation or review of the MSA and trusts and

signed the documents without the benefit of counsel. Plaintiff

also did not have counsel at the court appearance for the disso-

lution. Despite plaintiff being the petitioner for the dissolu-

tion, she claimed defendant presented the judgment of dissolution

of marriage (judgment) adopting the MSA. The judgment was

entered the same day. Defendant then took plaintiff to Quincy,

Illinois, and filed the judgment under seal in the circuit court

of Adams County. Plaintiff claimed she never received a copy of

the documents she signed or any of the documents relative to the

court's order.

After the court appearance, the couple returned home

and continued to live as husband and wife in the couple's marital

residence. According to plaintiff, defendant concealed the true

impact of the documents and judgment relative to their reconcili-

ation. Defendant told plaintiff that the documents were of no

practical effect by virtue of their immediate reconciliation and

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that they remained married by virtue of the resumption of their

marital relationship. Defendant prepared joint income-tax

returns on behalf of the couple representing that they were still

married for the years 1996, 1997, 1998, and 1999. Defendant

presented the returns to plaintiff. Defendant also submitted

documents to State agencies representing the couple's marriage

existed after the judgment order had been entered. Defendant

told plaintiff that in light of their reconciliation, the prop-

erty acquired since their 1983 marriage remained their common

property. Defendant did not prepare any documents transferring

the marital property to either of the trusts referenced in the

MSA or take any action to effectuate the terms of the MSA until

October 4, 2004. Plaintiff represented that defendant knew that

she mistakenly believed the following: (1) the effect of the

documents she signed was the division of the parties' marital

assets equally between the parties; (2) that by virtue of the

parties' reconciliation said documents were of no force and

effect; and (3) the parties continued to be married.

In 2000, defendant told plaintiff it was necessary to

formally reaffirm their de facto marriage relationship. The

couple was remarried in Tennessee on September 2, 2000.

In 2004, plaintiff advised defendant that she wanted to

dissolve their marriage. Defendant told plaintiff that because

of the documents she signed in 1996, they could divide assets

equally, with each having full ownership and access to their

share, by placing all of their assets in trusts jointly owned by

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them. Sometime in September 2004, defendant had his attorney

prepare documents, including (1) a petition for declaration of

invalidity of marriage; (2) appearance and consent; (3) judgment

for declaration of invalidity of marriage; (4) four warranty

deeds in trust conveying four parcels of property to plaintiff

and defendant as trustees; and (3) three warranty deeds of trust

conveying three parcels of property to plaintiff and defendant as

trustees. Defendant and his counsel presented the documents to

plaintiff and defendant advised her she was obligated to sign to

effectuate the equal division of their property. On or about

September 23, 2004, plaintiff signed the documents, including the

deeds transferring title to various real properties comprising a

portion of the parties' marital assets to irrevocable trusts

designating plaintiff and defendant as trustees but giving

defendant exclusive control. Again, plaintiff did not engage

counsel to represent her or review the documents.

On October 4, 2004, the trial court in Cass County

declared the September 2, 2000, marriage invalid.

Sometime in 2004, plaintiff discovered the true nature

of the documents she signed and that defendant's representations

to induce her to sign were fraudulent. Plaintiff filed suit on

April 27, 2005.

Defendant adds that plaintiff filed the petition for

dissolution on October 18, 1996. Further, plaintiff originally

filed a complaint for declaratory judgment on April 27, 2005,

seeking the following: (1) to declare the MSA and all deeds

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executed under cover of said agreement null and void; (2) to

direct defendant to account to plaintiff and the court of all

disposition of marital property; and (3) in the alternative,

award plaintiff damages in an amount equal to plaintiff's loss of

marital property and/or maintenance proximately caused by the

agreement executed by the plaintiff as a result of defendant's

fraud.

Defendant filed a combined motion to dismiss under

sections 2-615 and 2-619 of the Code (735 ILCS 5/2-615, 2-619

(West 2006)). Plaintiff then filed an amended complaint for

accounting and damages. Count I sought an accounting for all

assets comprising the parties' marital property as it existed on

October 18, 1996, and the disposition of said property in any

manner. Count II sought an accounting of all assets received as

cotrustee of the trusts and disposition of all said assets.

Count III was an action based on fraud seeking that defendant be

ordered to account to her and the court on all of the parties'

marital assets and all disposition of said property and award

plaintiff damages in an amount equal to plaintiff's loss of

marital property and/or maintenance proximately caused by the MSA

executed by plaintiff as a result of defendant's fraud.

Defendant responded to the amended complaint with a

motion to dismiss and a motion for sanctions pursuant to Supreme

Court Rule 137 (155 Ill. 2d R. 137) for plaintiff's false plead-

ings. Attached to the motion for sanctions was the transcript of

the 1996 dissolution of marriage proceedings. The transcript

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showed plaintiff told the court that she talked to an attorney

and he reviewed all the paperwork, she was paying her own attor-

ney fees, she and her attorney read through the division of

property, she understood that defendant was representing his own

interests and she had her own interests, she reaffirmed she

sought legal counsel, and she stated she was clear on the MSA.

The trial court dismissed all three counts of the

amended complaint holding that Pollard v. Pollard, 12 Ill. 2d

441, 147 N.E.2d 66 (1957), made it clear that a fiduciary rela-

tionship does not exist from the mere fact of a marriage alone.

The court went on to note that no authority existed that a

fiduciary relationship was established where the parties were

involved in dissolution proceedings, and the court noted that

once the parties became involved in adversary proceedings, it was

inconsistent that a fiduciary relationship could have been

created. Because the complaint alleged a fiduciary relationship

because of the marital relationship, the complaint was insuffi-

cient at law.

Plaintiff filed the second amended complaint on June

22, 2006, alleging a breach of fiduciary duty and fraud, asking

for an order directing defendant to account for all marital

assets in existence as of October 18, 1996, and asking that the

court award defendant damages equal to her interest in the

property. Defendant filed a motion to dismiss under section 2-

619 of the Code (735 ILCS 5/2-619 (West 2006)) alleging that the

complaint was an attempt to collaterally attack the judgment for

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dissolution of marriage and the complaint was not filed in the

judgment for dissolution of marriage proceedings within the time

frame required by law under sections 2-1203 or 2-1401 of the Code

(735 ILCS 5/2-1203, 2-1401 (West 2006)).

On February 21, 2007, the trial court ruled that the

second amended complaint was a reiteration of allegations in

prior complaints and that there was no independent cause of

action available to plaintiff outside the parameters of section

2-1401 of the Code (735 ILCS 5/2-1401 (West 2006)). The trial

court entered final judgment against plaintiff upon defendant's

section 2-619 motion (735 ILCS 5/2-619 (West 2006)), finding that

an MSA induced by fraud cannot sustain a separate tort action for

money damages and the only available remedy to plaintiff was to

attack the judgment of dissolution of marriage. This appeal

followed.

II. ANALYSIS

Plaintiff argues the trial court erred in finding that

no independent tort action seeking money damages for defendant's

fraudulent inducement of an MSA exists as a matter of law.

Defendant responds that the court was correct that no independent

tort action for fraud exists between former spouses in a dissolu-

tion of marriage proceeding in Illinois.

Plaintiff claims she is not attacking the judgment of

dissolution because her complaint is predicated upon the MSA

underlying the judgment and by extension based upon the judgment

itself. Plaintiff's tort action affirms the existence of the MSA

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and judgment entered therein and seeks money damages proximately

caused by the fraudulently induced MSA and judgment adopting it.

According to plaintiff, where fraud induces a contract, the

defrauded party may elect one of two remedies: (1) rescind the

contract or (2) accept the contract and pursue a cause of action

in tort for damages. Plaintiff elected to accept the contract

induced by defendant's fraud and the judgment of dissolution

adopting it and sue in tort on a fraud theory for money damages

she proximately sustained by virtue of the MSA. Because plain-

tiff did not discover the fraud until 2004, section 13-215 of the

Code (735 ILCS 5/13-215 (West 2006)) applied, allowing her to

commence her suit at any time within five years after she discov-

ered her cause of action.

Defendant argues once the parties to a dissolution

secure a final judgment for the dissolution of the marriage and

that judgment incorporates the MSA, the parties' only redress for

allegations of wrongdoing connected to the MSA is by an attack on

the final judgment under section 2-1203 or 2-1401 of the Code

(735 ILCS 5/2-1203, 2-1401 (West 2006)).

Defendant attacked plaintiff's petition through a

section 2-619 motion (735 ILCS 5/2-619 (West 2006)). A section

2-619 motion "admits the legal sufficiency of the complaint, but

raises defects, defenses, or other affirmative matter apparent on

the face of the complaint or established by external submissions

which defeat the action." Crusius ex rel. Taxpayers of the State

of Illinois v. Illinois Gaming Board, 348 Ill. App. 3d 44, 48,

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807 N.E.2d 1207, 1212 (2004).

The "affirmative matter" defendant raises is that

plaintiff's cause of action is actually an attack on the judgment

of dissolution, was not filed in the dissolution of marriage

proceedings, and was not filed within the time frame required by

section 2-1203, 30 days after the entry of the final judgment, or

section 2-1401, within two years from the date of the entry of

the dissolution judgment. Defendant's section 2-619 motion does

not dispute the elements of fraud in plaintiff's second amended

complaint.

Because parties to a divorce have a cause of action if

they are fraudulently induced to enter an MSA and because plain-

tiff has alleged fraudulent inducement in entering the MSA, we

find that she has a cause of action and the trial court must hear

the parties' evidence to decide whether the evidence is suffi-

cient to grant the relief requested.

In the context of a section 2-619 motion, this court

must accept as true all well-pled facts and all reasonable

inferences from those facts as established in plaintiff's com-

plaint. Crusius, 348 Ill. App. 3d at 48, 807 N.E.2d at 1212.

Plaintiff alleged that she was fraudulently induced to enter into

the MSA that defendant presented to her. A party to a divorce

who signs an MSA and subsequently proves that he or she was

fraudulently induced to sign the MSA has a remedy. See In re

Marriage of O'Brien, 247 Ill. App. 3d 745, 750, 617 N.E.2d 873,

876 (1993) ("A party contending fraudulent inducement in the

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making of a property settlement agreement which is incorporated

into a decree of dissolution may properly obtain relief pursuant

to section 2-1401"); In re Marriage of Hawkins, 106 Ill. App. 3d

68, 70-71, 435 N.E.2d 786, 788 (1982) ("a settlement agreement

procured by fraud, coercion, or one that is contrary to any rule

of law, public policy, or morals, will be set aside and va-

cated").

If a party is fraudulently induced to enter an MSA but

does not discover the fraud until the expiration of the two-year

statute of limitations in section 2-1401, the party is not

without a remedy as the limitations period is tolled during the

time that the grounds for relief are fraudulently concealed. In

re Marriage of Morreale, 351 Ill. App. 3d 238, 241, 813 N.E.2d

313, 317 (2004).

Assuming plaintiff's allegations are true, as we must

at this stage of the proceedings, she may bring an action that

she was fraudulently induced to sign the MSA. Even the passing

of 8 1/2 years from the entry of the 1996 judgment of dissolution

would not bar a section 2-1401 petition if she shows evidence of

fraudulent concealment. See In re Marriage of Halas, 173 Ill.

App. 3d 218, 223-24, 527 N.E.2d 474, 478 (1988). Also, we are

not convinced that the statute of limitations began to run in

1996 when the judgment of dissolution was entered because the

couple remarried in 2000 and the second marriage was declared

invalid in 2004 when the trusts, the subjects of the MSA, were

funded for the first time. This leaves open the question as to

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what effect the remarriage had on the unfunded MSA and what

effect the declaration of invalid marriage has on the then-funded

MSA. See In re Marriage of Parks, 258 Ill. App. 3d 479, 484, 630

N.E.2d 509, 513 (1994) (remarriage of the parties renders a prior

divorce decree unenforceable to the extent the judgment was

unexecuted or incomplete). Defendant has not shown that the

statute of limitations definitively bars plaintiff's fraud claim.

As plaintiff's allegations of fraud support a cause of

action, the trial court erred in dismissing her petition under

section 2-619. Expiration of a statute of limitations is prop-

erly raised under section 2-619, but the allegations of fraud

here are sufficient to toll the running of the statute. A

complaint should not be dismissed for failure to state a cause of

action under section 2-615 unless "it clearly appears that no set

of facts could be proved under the pleadings which would entitle

the plaintiff to relief." City of North Chicago v. North Chicago

News, Inc., 106 Ill. App. 3d 587, 594, 435 N.E.2d 887, 892

(1982); see also In re Marriage of Hoppe, 220 Ill. App. 3d 271,

285, 580 N.E.2d 1186, 1195 (1991) ("A motion to dismiss should

not be granted unless it clearly appears that no set of facts

could ever be proved that would entitle the petitioner to re-

cover"). "A pleading alleging fraud should not be dismissed on

its face if the allegations contained therein establish one

person made a false promise as part of an overall scheme to

defraud, and another was induced to act to her detriment." In re

Marriage of Fricke, 174 Ill. App. 3d 191, 195, 528 N.E.2d 370,

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372-73 (1988); see also Harris v. Harris, 45 Ill. App. 3d 820,

825, 360 N.E.2d 113, 117-18 (1977) (defendant wife's allegations

"although unartful, when combined with the claim that [wife's]

trust in her husband and his implied threat of nonpayment of

legal fees induced the defendant not to retain her own counsel,

are sufficient to allow defendant to present testimony and

evidence in support of the amended petition so that questions of

whether [husband] was guilty of fraud and coercion which induced

the defendant to enter into an inequitable martial settlement

agreement can be resolved by the proofs").

We note that we are not convinced that a fiduciary duty

could not exist according to plaintiff's allegations. This is

not a case of a divorcing husband and wife on level footing. In

this case, defendant husband is an attorney and plaintiff wife is

not. Plaintiff alleges defendant advised her regarding Illinois

divorce laws. Defendant clearly knew his wife was not an attor-

ney and might have known that she would trust his legal advice.

While a marital relationship alone may not establish a fiduciary

relationship, a fiduciary relationship may arise in a marital

relationship as the result of special circumstances of the

couple's relationship, where one spouse places trust in the other

so that the latter gains superiority and influence over the

former. See generally Gonzalzles v. American Express Credit

Corp., 315 Ill. App. 3d 199, 210, 733 N.E.2d 345, 353-54 (2000)

(discussing when a fiduciary relationship exists generally). An

attorney who is asked to represent both parties to effect an

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"agreed" settlement in a dissolution of marriage case has an

obligation to both parties. "Even the attorney who undertakes

his own divorce can encounter liability problems." 2 R. Mallen &

J. Smith, Legal Malpractice §22.1, at 330 (3d ed. 1989), citing

Anderson v. Anderson, 399 N.E.2d 391 (Ind. App. 1979). Under the

facts and circumstances of this case, plaintiff may be able to

establish a fiduciary relationship.

Plaintiff's complaint, while perhaps not well pled,

should not have been dismissed based on a section 2-619 motion as

her allegations establish a cause of action for fraud. We remand

for further proceedings to determine whether defendant fraudu-

lently induced plaintiff to enter into the MSA and, if so, what

relief will appropriately compensate plaintiff. We express no

opinion as to the merits of the parties' claim.

III. CONCLUSION

For the reasons stated, we reverse the trial court's

judgment and remand for further proceedings.

Reversed and remanded with directions.

McCULLOUGH and KNECHT, JJ., concur.

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